SHENZHEN--Huawei innovates at the application, product, and fundamental technology levels, but the latter is most important to the company's strategy because it forms the foundation for the first two.

When examining the results of innovation, people always notice innovation in the application and product, but not the fundamental technology innovation such as research surrounding mathematics and material science, noted Ken Hu, rotating CEO of Huawei.

"To use an analogy, it's like an iceberg, you tend to notice what is above the water--the application and product innovation--but not what is beneath the water, which is the fundamental technology," Hu said, speaking a media briefing Wednesday during the Global Innovation Index (GII) for 2013 Asia launch held at the company's headquarters here.

While it is easy for people to see the developments of the company's products and innovations, it is hard for them to visualize what goes on with the mathematicians and material scientists working at Huawei, Hu noted.

That said, its priority for research and development (R&D) and innovation remains in the fundamental technology, which is research on mathematics, wireless algorithms and material science--the "water below the iceberg", he pointed out.

Moving forward, he also hopes people will not only look at Huawei's innovation at the top but also what is "below the iceberg", allowing the company to be strong in terms of product and application innovation, he noted.

Continuous, global innovation marks Huawei's competitiveness

Hu noted innovation helped single out Huawei from its competitors and was a critical part of the company's business strategy, and added innovation had enabled the Chinese vendor to pioneer many product offerings within its core strength--the telecom network infrastructure.

Innovation, however, is "not a short distance run, [but] a marathon", he pointed out, adding Huawei had invested heavily in in R&D since its first day of operations.

For example, the company has an internal policy whereby 10 percent of its annual sales revenue are pumped back into R&D, he noted. Some 70,000 out of Huawei's 150,000 workforce are engaged in R&D work, and the company's R&D spend over the last ten years amounted US$19 billion, he revealed.

Outside China, it has established 16 R&D centers, even in countries where labor costs are higher than that of China because it is a better way for the company to integrate intellectual capital on a global basis, he added.

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